Suppose a firm produces the level of output at which the marginal cost of the last unit produced equals the price of the good. Which of the following statements is always true?
A. The firm should produce more if its economic profit is positive.
B. The firm should shutdown if its total revenue is less than its variable cost.
C. The firm will earn a positive economic profit.
D. The firm is maximizing its profit.
Answer: B
Economics
You might also like to view...
Which piece of legislation allowed states to pass right-to-work laws?
A) Wagner Act B) Landrum-Griffin Act C) Taft-Hartley Act D) National Industrial Recovery Act
Economics
_____________ is defined as firm's ability to earn above-average profit
a. Resource heterogeneity b. Superior performance c. Competitive advantage d. Sustainable advantage
Economics